If you are concerned that much of your estate will be forfeited to the government in the form of rising estate taxes, making gifts to qualified charitable organizations may allow you to achieve your legacy planning goals while reducing the amount of your assets that will be lost to taxes. Estate planning trusts can play an effective role in reducing estate taxes. Charitable remainder trusts are often used to support favorite charities while minimizing estate taxes. Estate tax rates could increase in 2018 or thereafter. Consult an estate planning attorney or a tax professional to learn about options for reducing estate taxes through charitable giving.
Using Land for Charitable Giving
If you are the owner of a farm, ranch, forest land, historic property or another type of real property you would like preserved for future generations, you may want to consider using a conservation easement as part of your charitable giving. Donating a conservation easement to a land trust or similar type of conservation organization may qualify you for substantial tax savings. It may also be a way to plan your legacy. To learn how to use a conservation easement as part of your estate plan, go to conservation easements.
Charitable Gift Accounts and Estate Planning
You may want to consider using a charitable giving account to make your charitable donations, whether you do so on an annual basis or as part of the estate planning process. You can make contributions through a charitable gift account that may be eligible for immediate tax deductions.
You can either let the account grow as an investment, for use in making donations to your favorite charities at a later date, or begin making gifts to charity after you have funds in the charitable gift account. A charitable gift account can be set up to meet your unique giving style, whether through monthly donations, annual donations, or random, unscheduled donations.
One of the greatest advantages to this type of charitable giving is if you own stock that has appreciated in value, you may be able to donate that stock to your favorite charity without incurring capital gains taxes.
Many of the nation's leading brokerage firms operate charitable gift funds. If you already have a brokerage account, IRA or 401k plan with one of these firms, it is easy to open a charitable gift fund account.There are many charitable funds from which to choose. Check with your financial advisor for more information on which charitable giving account is the best match for your estate planning goals.You can open a charitable giving account online and find all the information on how to make an immediate contribution. After your charitable giving account is open, there are a variety of easy ways to make contributions. You can contribute cash via check, wire or electronic transfer. You can transfer publicly traded stocks, mutual fund shares, publicly traded bonds, and certain other types of assets by completing a few simple forms.
After your account is funded, you recommend how the assets should be invested or you can have your financial advisor make recommendations regarding how to invest the funds. When you are ready, you make recommendations for grants to your favorite public charities.
Using a charitable giving account is an organized way to keep track of your charitable giving. You can track all your contributions online from one account and receive a single tax form to use with your tax filings. By using a charitable gift fund, you will have a variety of investment options so your donated assets can continue to grow tax deferred until they are donated.
You can also name a charitable gift fund in your estate plan. This can be done when you name beneficiaries in your will or other estate planning documents. To learn more about how to use your estate plan to make a positive impact, see Legacy Planning.